Bitcoin trader kicked out of 90 banks over cryptocurrency concerns

Michaela Juric has been trading virtual currency for seven years but her business, Bitcoin Babe, is now under threat due to financial institutions refusal to do business with her.

The banks named and shamed by Ms Juric in a parliamentary hearing into Australias technology and financial sector include Commonwealth Bank, NAB and Suncorp.

“As of yesterday, I have been debanked and banned from 91 banks and financial institutions,” she said.

“Theres been instances where de-banking has caused me to be denied from being able to get utilities or phone and internet services, which I think is very concerning.”

Debanking is when a bank chooses to no longer offer banking services to a customer.

In some cases, Ms Jurics customers have received calls from their own banks warning her bitcoin services were a scam, or had also debanked them all together.

Aus Merchant, a digital currency brokerage, has experienced four de-banking experiences in the past 12 months.

Managing director Mitchell Travers said the situation is causing the company to move to offshore banking.

“We are regulated by AUSTRAC, and offer all of our compliance documentation to support onboarding, and yet get a default negative response causing our business to seriously consider moving our traditional banking offshore,” he said in a submission to the hearing.

He told the committee the big four banks have adopted this policy as a stopgap measure to avoid competition.

“With the sort of anti-competitive nature of the banks, its somewhat buying them time,” Mr Travers said.

It could be considered a stopgap for them as they sort of educate and find a way to enter the space in a more profound manner.

“Risk avoidance until they have the sort of validation on their end, to then dominate the market, is my perspective.”

FinTech Australia echoed Ms Jurics comments. In a submission, the group said the practice is a considerable issue across the fintech market.

“The issue is complex, as it affects companies broadly across different fintech verticals, such as payments, loans, remittance services, crypto-asset exchanges and others,” FinTech Australia said.

AUSTRAC and anti-money laundering and counter terrorism financing (AML/CTF) laws, and anti-competitive conduct were labelled as the two major issues by the industry group.

In a submission to the inquiry, NAB chief executive Ross McEwan said the bank may choose to debank a customer if fintechs are using banking products for purposes which they are not intended.

“A product may be designed and offered according to certain commercial, risk or regulatory parameters,” Mr McEwan said.

“NAB may stop offering that product to a customer if it is not being used in line with its intended design or use.”

CBA said it would cease a relationship with a customer if the “source of funds and source of wealth is unable to be determined”, pointing to AML/CTF legislation.

In the 12 months to May 31, 2021, Westpac estimated it had exited eight fintech businesses.

“Westpac does not consider fintech to be higher risk or out of appetite per se,” group executive Les Vance said in his submission.

“However, there could be segments of the fintech sector that operate in higher risk areas or have higher risk aspects and these may result in a decision to decline or cease to offer banking services.”

Ms Juric told the committee she was registered with AUSTRAC but that made little difference to the banks response.

According to Home Affairs and AUSTRAC, the AML/CTF Act does not mandate debanking.

“A decision to ‘debank’ a particular customer sits with the relevant financial institution, and the AML/CTF Act does not mandate this practice,” the departments submission said.

“A range of additional factors may lead to a customer being de-banked, e.g. commercial considerations; reputational risk; uncertainty associated with new business models; expectations of overseas correspondent banks and a range of other regulatory requirements relevant to the financial sector.”